Reference no: EM132260356

Case : Whole Foods Market Uses Teamwork to Increase Productivity

In 1978 two entrepreneurs, John Mackey and Rene Hardy, began a challenging venture to create a company that incorporated the values of healthy living and conscious capitalism, all with a $45,000 loan. Their efforts led them to open a small natural foods store named SaferWay, founded in Austin Texas in 1980. The two founders had a difficult time beginning the company and later merged with Clarksville Natural Grocery, which culminated in the two companies becoming the world’s largest retailer of organic and natural food and personal care products. The company was called Whole Foods. Whole Foods has grown not only domestically but also internationally since its initial expansion in 1984.

Starting the business was no easy feat; the company has faced many challenges along the way. Less than a year after opening, a devastating flood hit Austin, which wiped out the store’s entire inventory. The company faced over $400,000 worth of damages. After weighing options, the company banded together to work as a team. With the help of the community, they were able to reopen their store in four weeks. From the beginning Mackey instilled company core values in all aspects of the organization.

Whole Foods’ core values have enabled it to turn its mission into a reality. The company’s values involve meeting customer needs and describe the company’s commitment toward selling the highest quality natural and organic products. Whole Foods also aims to create positive and ethical ongoing partnerships with suppliers, while simultaneously creating wealth through profits and growth as well as caring about the community and environment. The company also aims to delight customers by promoting the health of all stakeholders through healthy eating education. Along with management striving to implement these core

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Team members of Whole Foods are highly regarded and are given personal stakes in the company through stock options.

values, employees help to create this environment through daily interactions with customers. Employees are highly valued at Whole Foods and are labeled team members to empower them through their everyday contributions.

Team members of Whole Foods are highly regarded and are given personal stakes in the company through stock options. Company leaders realize that the success of the company depends on Whole Foods Market team members and believe in motivating and rewarding them for quality performance. At each Whole Foods store, individuals are divided into eight teams and are the backbone of the store. Initially, when an individual is hired, he or she is hired on a provisional basis and the team will vote at the end of the provisional period on whether to retain or dismiss the new employee.

This element is an important part of the Whole Foods culture because the company believes that working together is the most important thing that occurs during business hours. Hard work and positive attitudes are essential between team members because additional pay and profit sharing is based on team performance. Each individual relies on the productivity of the members in their team to receive these benefits. They cannot reach them alone.

Whole Foods also uses the talents of employees to improve company operations. It implements an open door policy that allows employees to provide feedback to managers and other team members, which ensures that clear and concise communication is constantly occurring in the store. In addition to this, Whole Foods strives to enrich the lives of Whole Foods employees and incentivizes employees to participate in a team member healthy discount incentive program. The company rewards employees for living healthy lifestyles when employees and team members reach certain benchmarks. To reach the goals of the program team members are prompted to work together while simultaneously encouraging one another through positive reinforcement.

Self-directed work teams consisting of employees make many of the decisions in the day-to-day operations of the different stores. For instance, teams have control over their scheduling and aim to work with each other to provide an optimal schedule for everyone. The company provides its team members with extensive training and resources, including an online site called “Whole Foods University” that provides educational information for team members. Courses provided through Whole Foods University range from information on the company’s gain sharing program to the company’s quality standards. By empowering its employees through teams, perks, and education, Whole Foods has been able to turn its workers into significant contributors of value for the company.55

1. Describe some of the ways Whole Foods encourages teamwork among employees.

2. Why does the use of teams allow Whole Foods to tap into a variety of talent?

3. How does Whole Foods make use of self-directed work teams?